Background <p>Schizophrenia is a chronic psychiatric disorder marked by recurrent relapses, which significantly affect long-term clinical and functional outcomes. Early relapse following a first episode of psychosis is linked to increased illness chronicity, higher hospitalization rates, and greater psychosocial impairment. While antipsychotic treatment can reduce the risk of relapse, recurrence remains common. Identifying predictors of relapse is essential for optimizing treatment strategies; however, evidence from low-resource settings, such as Ethiopia, is limited. This study aimed to examine clinical outcomes and identify key predictors of relapse among individuals with first-episode schizophrenia in Ethiopia.</p> Methods <p>An institutional-based retrospective cohort study was conducted at the University of Gondar Specialized Hospital, including 710 adults diagnosed with schizophrenia who received antipsychotic treatment and maintained regular follow-up over one year. Clinical outcomes were assessed using the Clinical Global Impressions-Schizophrenia (CGI-SCH) scale, which evaluates symptom severity across positive, negative, depressive, and cognitive domains and Outcomes were dichotomized into good clinical improvement and poor clinical improvement. Antipsychotic side effects and medication adherence were assessed using the Glasgow Antipsychotic Side-Effects Scale (GASS) and the Medication Adherence Rating Scale (MARS-10), respectively. Clinical outcomes and predictors of relapse were analyzed using Cox proportional hazards and multivariable logistic regression models, with statistical significance set at <i>P</i> &lt; 0.05.</p> Results <p>Among the 710 individuals diagnosed with schizophrenia, 457 (64.4%) achieved favorable clinical outcomes. The highest therapeutic response was observed in patients treated with Olanzapine, with 168 (36.8%) demonstrating significant clinical improvement. During the follow-up period, 33.5% of patients experienced at least one relapse episode. In multivariable Cox regression analysis, younger age (18–30 years; AHR = 1.43, 95% CI: 1.07–1.9), living alone (AHR = 1.31, 95% CI: 1.03–1.73), a positive family history of suicidal attempts (AHR = 1.45, 95% CI: 1.13–1.85), and the presence of moderate anti-psychotic side effects (AHR = 2.23, 95% CI: 1.42–3.5) were significant predictors of poor clinical outcomes. Furthermore, poor medication adherence (OR = 1.57, 95% CI: 1.07–2.13), presence of suicidal ideation (OR = 2.22, 95% CI: 1.54–3.22), younger age (OR = 1.42, 95% CI: 1.11–1.81), and lack of formal education (OR = 1.30, 95% CI: 1.10–1.53) were significant predictors of relapse among individuals with schizophrenia.</p> Conclusion <p>This study reveals that most individuals with schizophrenia achieve favorable clinical outcomes, relapse remains a major concern, affecting about one-third of patients. Poor outcomes are significantly associated with younger age, living alone, a family history of suicidal attempts, and moderate anti-psychotic side effects, whereas relapse is more likely among those with poor medication adherence, suicidal ideation, younger age, and lack of formal education. These findings highlight the need for early identification of high-risk patients and the implementation of targeted interventions to improve adherence, reduce relapse, and enhance recovery, especially in resource-limited settings.</p>